Marketing & Sales News 6/6/12

E-commerce firms tapping into mobile shopping

Recently, ecommerce has experienced two sharply modes of development: one is that new technologies have ignited the mobile ecommerce market, and the other is that the “money burning” marketing strategy has resulted in loss group. Is ecommerce coming to the end of its prime, or is it still weeding out the weak? The question has caused heated discussion about the future development direction of ecommerce by internet users.


In recent years, China’s online shopping market has developed swiftly, with some twists and turns. The development model in which companies seize market shares at the cost of huge money burning and loss has resulted in consolidation of the industry: the IPOs of Lashou.com and Vancl came to a deadlock; Shanda’s pinju.com, wooha, and l.163.com were shut down.
However, with the extensive popularization of smart phones, a huge number of consumers are already using mobile terminals to make online purchases. This emerging market has become the new battleground for major ecommerce enterprises.
Bottlenecks of conventional ecommerce companies
As internet ecommerce websites become more popular, more and more internet companies are joining the ecommerce business, with even some video and community websites gradually turning to ecommerce. In 2011, the transaction volume of ecommerce accounted for 4 percent of national consumption.
Although this is not a small number and is inclined to continue to grow for years to come, many ecommerce forerunners have already spotted the bottlenecks to the future development of this huge market.
Due to internet availability and diversity of online payment methods, conventional ecommerce models can cover only medium to large cities, providing online shopping service to only these specific population groups. The huge market of residents in third- and fourth-tier cities and farmers in rural areas is yet to be fully explored.
A person with profound knowledge about ecommerce said frankly that: “Today, there is still vast room for the development of ecommerce. Nonetheless, not all enterprises can catch the big fish in the present ecommerce market in China”. In this regard, conventional commerce companies have found a new way: switching to mobile ecommerce.
Focus on mobile ecommerce
By now, a commercial poster on the roadside has become a sales outlet. Scan the two-dimension code on the poster with a smart phone, and the explorer will jump to a corresponding shopping website. Click to place an order and the product will be delivered to you by the end of the day.
In comparison with internet ecommerce, mobile ecommerce breaks the limit of time and space, and is more flexible and convenient. Purchase can be made anywhere, anytime. In 2012, the investment market of the mobile internet is boisterous. Investment institutions are very optimistic about the development opportunity of the mobile internet.
According to statistics, the transaction volume of China’s mobile ecommerce market in 2011 is RMB 15.67 billion Yuan, an increase of 609.0 percent compared with the same period of the previous year, and the mobile ecommerce market in China is expected to reach RMB 25.15 billion Yuan in 2012, with a mobile ecommerce user population of 146 million people. Currently, the value of commodity tractions on mobile phones and other mobile terminals accounts for about 35.8 percent of the total volume of the mobile commerce market.
All internet ecommerce enterprises view mobile ecommerce as an important strategic target of the future development of ecommerce. Conventional ecommerce tycoons, including Taobao and 360buy, have all introduced their mobile clients that are based on their own platforms. Their target is no other than China’s 900 million mobile phone users and 500 million mobile internet users.
Zhang Zhouping, an analyst of China Ecommerce Research Center, believes that mobile ecommerce in China will welcome a phase of explosive development in the next two years. “The gradual popularization of smart phones brings excellent opportunities for mobile ecommerce”.
Exploration and improvement still needed in the market
It’s of no doubt that mobile ecommerce will welcome a phase of major development. Nonetheless, it doesn’t mean that China’s mobile ecommerce industry is already equipped with very good conditions for development. It still needs to cross many obstacles before it can enter the household of common people like internet-based ecommerce.
On one hand, users’ habits still need to be cultivated. The development of the mobile application of China’s ecommerce is still in its early stage. The internet and shopping environment is immature compared with that in foreign countries. The most important thing is to change the consumption idea of the Chinese people, from computer shopping to mobile phone shopping. Ecommerce companies still need to work harder in this regard.

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